CFA Practice Question

CFA Practice Question

Which of the following is most likely correct?
A. Total fees for Funds of Funds would be lower than for individual hedge funds.
B. A downgrade by a credit rating agency will narrow the credit spread.
C. Natural disasters such as floods contribute to Event Risk.
Explanation: Total fees for Funds of Funds would be higher than for individual hedge funds. A downgrade by a credit rating agency will widen the credit spread (lead to a drop in price, thus increasing yields and spreads).

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